"Tata in the UK Means they Closed the Corus Factory"

Peter Unsworth, chief executive, Tata Global Beverages, says that the Tata brand doesn't carry the same meaning in Europe as it does in India

Published: Jun 7, 2010
"Tata in the UK Means they Closed the Corus Factory"
Image: Vikas Khot
Peter Unsworth, chief executive, Tata Global Beverages

Peter Unsworth
Age: 51
Title: CEO, Tata Global Beverages
Education: B.Sc from Nottingham University
Career: Has been with Tetley, which Tata Tea acquired, since 1996. Before that Unsworth worked at UK’s Coal Board and ran a management training business.

You have seen some down trading in the Indian market because of the rise in tea prices but have overcome it. How did you do achieve that?

If prices, which are a significant percentage of the total, go up then you have to react pretty quickly or your margins get clobbered. Now what we do as a branded player, always, even if the price of the product is going up, we try to deliver the same quality. The view that I took always is that tea is a relatively cheap drink. In fact, in most markets, apart from water, it is the cheapest drink there is.
So what we should do as a branded player always is, if there is a commodity cost increase, we should try and pass it on. It is still a cheap product. If we don’t pass it on then value is taken out of the market. So, no doubt about it this year, Sangita Talwar [executive director] and her team have done a brilliant job of convincing consumers to stay with us. It comes down to the strength of the brand. If you don’t put the price up you lose the margin, if you lose margin, you can’t invest in advertising. So what Sangita and her team has done is take prices up and take the market with them.

What does the rebranding from Tata Tea to Tata Global Beverages mean for consumers?
It’s a debate. For most consumers it will not mean anything and there is a debate as to whether we want it to. If we’ve got Tata Global Beverages too prominently on the pack, it’s confusing and I’ll personally get letters from people. So in the short term we have to be very careful. In India that [points to the Tata logo] means something. In the UK for most people Tata means they bought Corus and closed the factory there or they bought Jaguar-Land Rover. What we’ve got to be careful is that we don’t change the meaning of the brand too quickly. Over the long term I am sure Tata Global Beverages may begin to mean something to consumers and we can leverage it.

You have been making acquisitions for the last few years. What are the pieces that you need to focus on now?
We’ve got places where we are strong already — India, UK, western Europe, Canada. We’ve got brand leading shares in most of those markets. We’ve got footholds in — Russia and the US. Then we’ve got in to the Middle East, which is less of an opportunity but a big challenge. And at the same time we are trying to develop new, disruptive products.

What I’ve been talking about recently is a bit more focus. We’ve got to really stabilise and grow in Russia and the US. We’ve got to then create disruptive products that will then put in to the core tea markets and Russia and the US. We’ve got limited resources and we are a relatively small player in the beverage space. We will focus on making those, and specially Russia and the US, stable and making them our core markets.

Is it time to take stock of three years of acquisitions?
We are breathing. Doesn’t mean to say we are finished with acquisitions. Russia and the US are places where scale is important. It may well be that there are inorganic as well as organic opportunities. The scanning we do will be across the world.

What we have tried to do in our communications is really push the bounds to say we are different now and to get people to accept that we are different. Now a little bit of breathing, a little bit of focus and a little bit consolidation is not a bad thing because it gives us a stronger platform to leap from to the next stage.

(This story appears in the 18 June, 2010 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

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